E-drug: Re: US compulsory licensing proposal for medicines (contd)
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I've been following the E-Drug discussion on compulsory licensing and I have
to say that I am surprised how little business sense most e-drug
participants seem to have. To me, what it comes down to are two things,
which John Urquhart has tried to explain to our generally very idealistic
(or should I say socialist?) e-drug colleagues.
The first is that the research-based pharmaceutical industry is a high
risk-high reward business and if you take away the high reward through any
kind of governmental intervention, pharma companies will not be willing to
take the high risks anymore and branch out into generics, consumer goods,
and perhaps even other industries in order to gain a decent return on
investment. I don't understand why so many e-drug participants think that
this profit motive is so "depressing" and why the US pharma industry cannot
be held as the main driver of innovation. Can anyone tell me which country
or even group of countries surpasses the US in drug development? Or how
many innovative drugs there are that were not only invented, but also
developed and distributed by not-for-profit organizations? Am I right in
saying that many of you are in effect arguing that capitalism doesn't work?
Ask the people in Cuba and North Korea how there lives are; that's what I
would call depressing.
The second is that history has provided enough evidence that drug
development by governments and not-for-profit organizations generally does
not work well (I assume because of a combination of bureaucracy, a lack of
financial resources, and the lack of a profit incentive) and is done much
more efficiently by for-profit corporations. In the press it is often
mentioned that a lot of pharma research is paid by the US taxpayer through
the NIH, which is only partly true, but -- as John Urquhart mentioned --
inventing a drug is only the first step in the process towards a safe and
effective drug and this development process is long, expensive and full of
risks. I don't think there is any government or not-for-profit organization
that can or is willing to spend the billions of dollars that companies like
Merck or Pfizer are putting at risk in their R&D operations (which, by the
way, are not only targeted towards lifestyle drugs).
I hope that some day lawmakers, consumers, scientists and activists who
still believe that the government and not-for-proft organizations are the
main drivers of innovation will have a better understanding of how the
pharma industry (and business in general) works, because if not, we will
probably never find a cure for AIDS, cancer, and other diseases.
Otto R. Scholtz
Co-founder and COO, Voltage Inc.
New York, NY, USA
E-mail: otto.scholtz@voltageinc.com
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